SAINTS are set to launch an appeal against the 10-point penalty which has condemned them to relegation from the Coca-Cola Championship.

The Football League imposed the penalty having investigated Saints' finances since their holding company, Southampton Leisure Holdings plc, went into administration.

Saints argued that because the club itself is not in administration they should avoid the mandatory points penalty, but the League today decided the 10-point deduction stands.

If the south-coast club finish outside the bottom three they will still be relegated as the points will be taken from this season's total, while if they finish in the drop zone they will start next season in League One on minus-10 points Saints, currently second from bottom and four points from safety, therefore face the bizarre prospect of playing their final two games for the right to start the League One season on zero points rather than to avoid the drop.

But the saga is set to drag on after administrators issued an angry response to the League's decision.

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Their statement read: ''The administrators and the club were informed of the League's intention to issue a release on the findings of the independent forensic report five minutes before its publication, leaving no time for consultation and to inform fans, players and staff.

''We are of the opinion that an incorrect conclusion has been reached. The football regulations do not apply to the circumstances surrounding Southampton Football Club.''

Saints also refuted the Football League's claim they withdrew their co-operation towards the investigation.

The statement concluded: ''Both the club and the administrators are now considering their positions and expect to launch an appeal.''

Football League chairman Lord Mawhinney acknowledged the club do have the right to appeal.

He said: ''There is an appeal mechanism and it's up to Southampton to decide whether they want to appeal and on what basis.''

He added: ''(The decision) wasn't inevitable, we commissioned forensic accountants to look at the situation. They gave us their report, they drew our attention to the holding company's annual report and we got external legal advice.

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''The weight of all three of those made it clear that the club's affairs were inextricably linked to the holding company and, as a consequence, we took the view that an administrator had been appointed relating to the club and therefore we had no choice under our regulations but to apply the sporting sanctions.

''I have sympathy for the fans but the fans know as well as the rest of us that this has not been a shining example of football management.

"We have had changes and tension at board level and so the fans have had a difficult time.

''I can't imagine there is a Southampton fan in the world who welcomes this decision but the job of the Football League Board is to protect the integrity of the competition and that is what we have done.''